Volunteering After Retiring – Why Not?
By Jim Meynard, CFA
Executive Director
Georgia Firefighters' Pension Fund
At the October 20, 2004 meeting of the Board of Trustees of the Georgia Firefighters' Pension Fund, the Trustees approved a resolution to allow retirees to “donate” their time and resources in volunteer service to their local fire departments. The approval of this resolution is the culmination of considerable research and study of the statutes and much discussion with Board members, retirees and active firefighters. I undertook this study because volunteering after retiring seemed to make sense, more sense than retiring on the job. The text of the full resolution appears at the end of this article. The following discussion takes the reader through the logic of how the resolution came into being.
A couple of years ago, in 2002 to be exact, it was proposed to the Pension Board that firefighters be allowed to draw their state pensions once they had achieved age and service requirements, whether or not they left their jobs. The arguments made in favor of this treatment were many, after all what difference did it make whether one worked at Home Depot or with the Fire Department after retirement, retirement was retirement. This would encourage retention of much needed expertise among the senior staff, too. The State Teachers Retirement System had begun allowing teachers to return to work and keep their benefits. And, the Peace Officers had secured this “benefit improvement”; therefore, it would seem appropriate for the Firefighters, too.
The GSFA supported this change, but the leadership and the Joint Legislative Committee applied the caveat that the Board of Trustees of the Pension Fund must support it also, and wisely, that such a change must not adversely impact the Fund and its ability to pay future benefits. Our statute, O.C.G.A. 47-7, prohibits accepting benefits while being employed as a firefighter, so this change would require legislation. The Attorney General had previously opined that collecting benefits from a system while still employed under that system was “obviously inimical” (hurtful or damaging) to that pension system. The Board opposed the change on several fronts, raised some questions that we will not re-visit here, and the actuarial analysis did not support the change financially.
But what about the Teachers? These were special situations. Returning teachers were considered one time contractors, engaged only on an as-needed basis for at-risk schools. Teachers were not allowed to retire in place, collect benefits and keep their current jobs. How about the Peace Officers? They are allowed to collect their pensions as soon as eligible without leaving the force, as noted. They have also since doubled their dues and their retirees have not had a COLA increase since this benefit change was implemented.
The ensuing discussion did highlight, however, the issue
of volunteering after retiring, particularly from a full-time paid position. And it brought into question the difference
in “retiring” from a volunteer position, possibly in the same department. Indeed, the concept of volunteer firefighters,
covered by a pension plan, is a complication not faced or addressed by plans
like the POAB. It is further
complicated by the fact that most “volunteers” are compensated in
one form or another, legitimately, for their service, such that they are actually
part time firefighters in many cases. The Standards and Training Council wrestled
with this issue relative to certification requirements vis-á-vis Senate
Bill 169 just recently without a final resolution in that regard.
In the debate regarding retirement while working, the detriment to volunteering often came up, and although it was seldom the point issue, it stuck in my mind as a question as to why the statute had that restriction. The answers lie in tenets of compensation for volunteers, split departments, etc. Indeed, as I learned more about our Fire Service through conversations not necessarily related to this issue, I learned the circumstances of volunteers, the difficulties of recruiting, needs for some compensation or reimbursement and other inducements to serve the communities. When I focused on the definition of firefighters, as it related to SB 169 and the possible impact on pension service, I noticed that, according to the statute, benefits were suspended if a retired firefighter became “a paid employee of a fire department or of a volunteer fire departmen…” Re O.C.G.A. 47-7-101 (b). The AG’s Opinion, U75-31, deals with the “termination of official duties” and “employed status”. And, our regulations, Rule 513-7-1.12, states that benefits commence when a “member is no longer employed as a fireman.” This was interpreted years ago by the staff, given the circumstances of volunteers, I can only suppose, to mean one cannot work with or be associated with a fire department in any capacity and continue to receive benefits.
That actually made some sense, in the sensibility of the AG’s opinion and the spirit of retirement systems as it related to paid volunteers. And, it took the pension staff out of the business of adjudication of what represented employment with a volunteer department.
My view, formed with the help of David Will, our Legal Counsel, was that the statute did not preclude volunteering after retiring, but did preclude paid volunteering after retiring, that is, a retiree may truly volunteer to help a community fire service on a pro bono basis without the loss of benefits. David and I crafted the following resolution, which, after several suggested revisions by the Trustees, was adopted at the October 20 meeting:
Resolved by the Board of Trustees:
By
motion of the Board of Trustees of the Georgia Firefighters' Pension Fund,
it is resolved that full time and volunteer firefighters, after retiring from
service with their respective fire departments and commencing to receive benefits
from this Fund, may then volunteer to donate their time, service and resources
to assist their local fire department in any capacity deemed appropriate to
their expertise. So long as the
retired firefighter is not compensated by the hour, by the call, per diem,
by added premium to county or municipal service, or in any manner related
to his/her service; the retired firefighter may continue to receive retirement
benefits.
The determinant of whether a firefighter
is compensated or not compensated will rest with the production of tax reporting
documentation for the individual. If a Form W-2 or Form 1099 is issued to report taxable income
or transfer payments to a retired firefighter, then compensation will be presumed
and benefits will be suspended. If
a retired firefighter is reimbursed for purchases made for personal equipment
or on behalf of a fire department, bona fide receipts, certified by the firefighter
as correct, must be maintained and available to the pension office on request
for a period not to exceed seven years.
Representatives
of the Board of Trustees of the Georgia Firefighters' Pension Fund reserve
the right to audit department records to determine the veracity of any firefighter’s
status at any time.
Ref. O.C.G.A. 47-7-101 (b) and AG Op. Att’y
Gen. U75-31
This resolution will be incorporated into the Rules and Regulations when next issued in the not too distant future. Any questions regarding this resolution and its implications should be directed to me at 404-370-5070.